The 30-share Sensex plunged more than 713.53 points to end the choppy session at 34,959.72, while the broader Nifty 50 index slumped below the 10,500-mark as weak global cues such as a sell-off in US equities, reactions to exit polls as well as weak macro data weighed.
A complete mayhem was witnessed in the domestic stock markets with both the headline indices bleeding more than 2% each. The 30-share Sensex plunged more than 713.53 points to end the choppy session at 34,959.72, while the broader Nifty 50 index slumped below the 10,500-mark. Among various factors, weak global cues such as a sell-off in US equities, reactions to exit polls as well as weak macro data weighed on the headline indices. Viscous sell-off was visible across all major sectors, with maximum pain seen among banks, automobiles, energy, consumption and pharmaceuticals, among others. Coal India, Maruti Suzuki, IOC and BPCL were the top gainers, while Kotak Mahindra Bank, Reliance Industries, and Indiabulls Housing were among the top Nifty losers. We take a closer look at three key factors behind the market mayhem.
Ahead of the crucial state elections scheduled for tomorrow, the investor sentiment took a beating as exit polls prediction weigh. “In the very short-term, liquidity and investor sentiment drag the markets, but in the longer term usually fundamentals take over. As far as we are concerned, a lot of factors impacting economy have turned favourable now. The only factor left out is the state elections, followed by its likely impact on the general elections. Our sense is during this period, the stock market is likely to continue to remain volatile,” Harsha Upadhaya of Kotak AMC told ET Now. Notably, market sentiment took a hit after exit polls indicated that the Bharatiya Janata Party risks losing control of Rajasthan to the Congress, and faces a stiff competition in Madhya Pradesh and Chhattisgarh.
Global stock market plunge
Emerging-market shares dropped to a near three-week low on Monday amid weak data from the world’s biggest economies, concern over tension between the United States and China and a potentially disastrous Brexit. Disappointing U.S. jobs data on Friday sent Wall Street more than 2 percent lower and the mood spread through developed and developing markets in Asia on Monday, Reuters reported. Asian peers including Hang Seng, Nikkei and Shanghai bled on Monday, tracking a sell-off on Wall Street fuelled by lingering concerns about the China-US trade standoff.
Brent crude oil rose on Monday after producer club OPEC and some non-affiliated suppliers last Friday agreed to a supply cut from January. Despite this, the price outlook for next year remains muted on the back of an economic slowdown. International Brent crude oil futures were at $62.03 per barrel at 0748 GMT, up 36 cents, or 0.6 percent, from their last close, Reuters reported. Prices surged after the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC producers including heavyweight Russia on Friday said they would cut oil supply by 1.2 million barrels per day (bpd), with an 800,000-bpd reduction planned by OPEC members and 400,000 bpd by countries not affiliated with the group.